The New York Times has published a fascinating article on China’s booming “shanzhai” phone market, with small companies shamelessly borrowing from manufacturers like Apple and Nokia to create cheap knockoffs with names like the Hi-Phone and the Nokla N97.
Five years ago, it was impossible to create a knockoff, but two key developments have changed everything. In 2005, a Taiwan-based semiconductor company called Mediatek created a turnkey solution in the form of a low cost circuit board with software that made it easy to integrate other components. In 2007, regulators abolished the requirement for cellphone manufacturers to obtain a license.
Of course, cheap doesn’t typically mean good. China’s Ministry of Industry and Information Technology has warned consumers that shanzhai phones usually exceed the legal radiation limits, and according to the Consumer Protection Agency, faulty handsets were the leading cause of consumer complaints in 2008.